The legendary investor said costs for healthcare have exploded in
the US and are holding back business growth.

Buffett pointed out corporate tax payments as a percentage of GDP
have shrunk from 4% in 1960 to just 2% now. On the other hand,
medical costs have ballooned from 5% of GDP to 17% of GDP
currently.

“Medical costs are the tapeworm of American economic
competitiveness,” Buffett said.

Buffett said that the lower rate of healthcare spending in
other countries is one of the biggest disadvantages for US
businesses.

The Berkshire Hathaway CEO also said that for his own business,
“the tax system is not crippling our business around the world,”
but the burden of healthcare costs make it more
difficult to do business.

Additionally, in regards to the American Health Care Act — the
bill passed by the House on Thursday to repeal and replace
Obamacare — Buffett did not offer a forward prediction on how it
would impact people’s healthcare but he did say it had one direct
impact on him.

“The net effect of that act is that my federal income taxes
would have gone down, down 17%, last year,” Buffett said.

“It’s a huge tax cut for guys like me.”

Buffett went on to say that the AHCA will lower taxes
significantly for people making over $250,000 that have
large investment income.

“That means one of two things, either the deficit goes up, or
someone else’s taxes do,” Buffett said.

Charlie Munger, Buffett’s partner, also decried incentives
for healthcare providers to charge ever higher costs
for procedures with questionable impact, saying there is “too
much chemotherapy on people that are basically dead.”

“A lot of it is greatly immoral,” Munger said. “You have a
lot of doctors and hospitals that are feasting on a dying
person like jackals on a carcass.”

While Munger and Buffett did not offer particular policy
solutions, they did say that the issue is being dealt with
poorly by politicians on both sides of the aisle.

“Both parties hate each other so much that neither one of them
can think rationally,” Munger said.